Monday, September 16, 2013

Summers at the Fed: A Final Note

I
suppose there is nothing staler than yesterday's Fed nominee, but I
somehow feel constrained to add a followup to the superplus excess of
stories about the virtues and defects of Larry Summers—and an
invidious comparison to the present Fed chair, Ben Bernanke.

Here's
the thing: the one thing everybody seems to agree on re Summers,
friend and foe alike: he's b-r-r-r-illiant, with the particular
capacity for coming into a room and just blowing everybody away with
his success at mastering his brief (counting “foes,” I exclude
people like Rick Perry who simply do not give a damn what they say).

I have
no basis on which to quarrel with b-r-r-r-illiant, and I actually
liked the little bits of authentic Summers scholarship that I've run
across (I even liked the one about exporting pollution costs). But
could it to be that Summers' ultimate purpose in life is to blow
people away, and that he cares far less about what he says—or even
what he achieves—than he does about his success in leaving people
gobsmacked by his knack for saying it?

Which
brings us to Bernanke. I'm not going to venture a judgment on
whether Bernanke is as brilliant as Summers (though I bet Summers
would). But the personal traits use to identify him seem almost the
opposite of Summers': his modesty, his courtesy, his disposition not
to make himself the center of attention. Sometimes in the work of
journalists, this can come close to Stockholm syndrome: the reporters
who know him best seem almost constrained to write about how the
world at large just doesn't understand what a good job Bernanke is
doing.

Actually,
I'd agree that he has done a good job: probably as good a job as
anybody could have been in these perilous times. But he's made his
blunders (Not Seeing it Coming certainly counts for a lot). If he is a success, he is at best a success on balance--but that may be the best we have any right to expect. At any rate, my immediate point is that insofar as he has accomplished anything, those traits of personal character have a lot to do with it—that it's
more than merely cosmetic, that the very qualities that win the
hearts of reporters are qualities that make him so effective in his
job. If nothing else, the very idea of a Fed chief who is not Full
of Himself, must alone be enough to leave his adversaries
wrong-footed. Now, is there any other candidate with that sort of
personality?

8 comments:

This is the man who favored doing away with Glass-Steagall. The man who favored deregulating derivatives.

That kind of foresight, not to mention his social intelligence, including his personal charm, especially around women, make "brilliant" one of the most undeserved adjectives ever applied to Larry Summers.

NY Crank: There is a big difference between brilliance, on the one hand, and good judgment and wisdom on the other. Of all the people who are in awe concerning Summers' brilliance, I doubt that any would be so with respect to these other traits. A healthy respect for the unknown unknowns is common among the wise and, IMH experience, far less so among the brilliant. Similarly (IMHE), recognition of the need for regulation is rare among brilliant economists less so among the wise ones.

In your listing of deregulation, Glass-Steagall, derivatives and oblique reference to Summers' public statements, I think What you are complaining about concerns Summers' lack of wisdom (& GJ) not any lack of brilliance.

Ah, but I never said he was brilliant. Merely b-r-r-r-illiant, which is quite a different matter. Afterthought, this analysis may help to explain why Keynes struck out so completely at Bretton Woods. Just sayin.'

NYC: Brilliance has its uses. It can lead to insights that others miss: e.g., relativity, quantum mechanics, natural selection, Godel's theorem, the periodic table, Arrow-Debreu general equilibrium ... (note that many but not all of these examples are mathematical). Knowing when each of these things is an appropriate and useful tool of analysis requires something other than brilliance, as does understanding the limitations of each.

Think of brilliance (alone) as being something of the same species as idiot-savantry.

The NYC: 1) I've never dealt with him up close and personal, but both by reputation and by the account of some whom I know, it is common for him to cut through the analytic fog that so often bedevils economists' reasoning and to do that more rapidly than anyone else in the room.2) Notice that I used the modifier can in my last post, without attributing any specific piece of insightful brilliance to the man.